ViewPoints Blog

Getting to the next level: How are you performing?

We recently hosted an HFMA webinar presentation and invited one of our clients, the CFO of OSF HealthCare, to discuss OSF’s approach for driving performance management. It was clear from the impressive results achieved at OSF ($160 million annualized savings!) that while making incremental progress may have been sufficient in the past, getting to that next level of meaningful and sustainable performance improvement is now critical for hospital and health system leadership teams.

Over the course of the next few weeks, we’re going to spotlight each of these questions and ask you to consider if you can answer each adequately for your organization.

Let’s start with the first question: How am I performing?

When assessing performance, it is helpful to look at both internal performance trends and performance relative to targeted peers. Your internal overall cost position trends, usually on a cost/adjusted admission basis, are critical to understanding your absolute performance levels and whether or not they are aligned with your strategic and other needs.

By comparing your performance to a select peer group, you can gain insight into relative performance, inform realistic target-setting and understand what other organizations are able to accomplish. However, to make sure you are getting the best information, consider the following:

Are you able to set realistic goals based on data relevant for your organization?

I’ve seen a lot of performance management initiatives get derailed because organizational goals aren’t realistic or meaningful. Successful goal setting is typically the result of triangulating several factors such as:

Overall cost position on a cost per adjusted admission/discharge level

Organizational year-over-year margin trends

Organizational aspirations

Total performance improvement opportunity from detailed comparative peer group analytics

Strategic, board level or other initiatives

Balancing each of these with organizational context and leadership judgment will produce a logical, appropriate and justifiable improvement goal. Once that’s set, the goal can then be cascaded at the facility and functional levels.

Is your comparative benchmark tailored and relevant?

Precise peer groups provide the most relevant and actionable comparisons possible. At the system level, you should be able to see a customized peer group of like-health systems AND the ability to compare “sisters” within your system. Facilities should be confident that their peer group is rigorously tailored to match their volumes, mix and other factors.

Is the comparative opportunity assessment methodologically rigorous? Is the data accurate and transparent?

Inaccurate data will doom any improvement initiative, so ensuring that your comparative peer group has comparable data treatment is critical. If you aren’t sure how you or others in your peer group have mapped the cost and clinical data, then it’s hard to effectively compare and have confidence in the results. It also helps to be able to dig in to the data at any point and see what adjustments were made, so you or your team have complete transparency and can address questions as they arise.

Having confidence in comparative methodologies is important to establishing credibility throughout the organization. Knowing that outliers are appropriately excluded, for example, makes a big difference with department and clinical leaders.

Has your organization been engaged in the process?

Engagement of department leaders in the process is essential for building confidence, promoting data acceptance and accountability -- key drivers of performance improvement. Having a collaborative approach ensures that the nuances and intricacies of your organization are captured in the data, factored into the comparison, and generate relevant insights.

Can you get an integrated view of clinical and operational performance and improvement opportunities?

Being able to seamlessly assess and manage comparative performance between operational and clinical areas is critical to managing an integrated healthcare organization. When you can easily and consistently move through operational areas to explore clinical variation down to the DRG-, case- and doctor-level, you can find actionable insights at each level.

As we continue our series, you’re going to see how addressing each question opens the door to the next. While these questions may appear to stand on their own, successful, lasting performance improvement really requires you to answer them collectively.

Our next post will take a closer look at question #2, ‘Where are my opportunities?’ In the interim, reach out to me with your questions and comments. My email address is jwhittlesey@ivantagehealth.com.